Earnings and schooling: an overview of economic research based on the Australian Twin Register.

This paper reviews four economic studies of aspects of earnings and schooling conducted by the authors using data from the Australian Twin Register. First, estimates of the economic returns to schooling made using fixed effects and selection effects regression models incorporating an instrumental variables approach to correct for measurement error in self-reported schooling levels are examined. The finding is that up to 30 per cent of the estimated return to schooling may be due to family effects and the remainder to pure educational effects. Second, comparisons are made between the economic model of Ashenfelter and Krueger (1994) and that of DeFries and Fulker (1985) and the results obtained from each are shown to be similar. Third, gender differences in returns to schooling are estimated and family effects are found to be a more important influence in the case of males. Fourth, the influence of family effects on educational attainments is considered and it is found that around one-half of educational attainment is accounted for by genetic inheritance and up to another quarter due to shared environment effects.